NRI Bank Account Services

What is an NRI account?

In India banking terminology, the term NRI account refers to fonfunds deposited by a Non-Resident Indian or NRI with a financial institution authorised by the Reserve Bank of India to provide such services. A Non-Resident Indian is an Indian citizen who primarily resides outside of India.
For example, a NRI account held in an India-based bank or another Reserve Bank of India authorized dealer could be opened by a citizen of India who is living for an uncertain but extended period of time in the United States or another country outside of India. The Non-Resident Indian citizen might be operating a business, working for someone else, or obtaining higher education.

How to open NRI Bank Accounts

To open the NRI account, following are the main steps:

NRI or PIO status: The NRI status is pre-requisite for the account application. Make sure you qualify, especially if you have been out of India only for a short period as a visitor. For details, refer to the frequently asked questions on the official site of Indian government . The web-site also covers information for a person of Indian Origin (PIO) and the qualifications for the accoun

Bank selection: Based on personal or geographical preferences, choose a bank that is right for you. Many of the banks have lots of information online as well. Make sure that the bank is authorised by the Reserve Bank of India (RBI) for NRI accounts.

Account type: All of the major banks provide lots of information to complete the application and to select what type of account you should open based on your financial situation and the country you live in. RBI has quite a bit information on its site under 'Features of various Deposit Schemes available to Non-Resident Indians (NRIs)'.

Account application: Most of the banks will provide online as well as on-site (at the bank) help on this. The banks also provide the list of documents or IDs required to complete the application. Interest rate and other information on the banking rules is available from the bank; the same is also available on their web-sites. Earnings on the NRI account may be subject to income tax; make sure to check this with the bank and your country of residence.

What are the NRI Account Benefits

If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain three different types of accounts - NRO account, NRE account and FCNR(B) account -- with an authorised dealer in India, i.e. a bank authorised to deal in foreign exchange. NRO Savings accounts can also be maintained with the post offices in India. One of the advantages of opening an NRI account is that it can be used by Non-Resident Indians to invest in and trade the Indian financial markets. Besides, there are a host of investment facilities for NRIs:

Shares in Public Sector Enterprises being dis-invested by the Government of India, provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids.

Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB)

Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme.

NRI Banking Services

Types of accounts which can be maintained by an NRI / PIO in India

A. Non-Resident Ordinary Rupee Account (NRO account)
Any person resident outside India may open NRO account with an authorised dealer or an authorised bank for the purpose of putting through bona fide transaction in rupees.
Opening of accounts by individual/ entities of Pakistan and entities of Bangladesh require prior approval of Reserve Bank of India.
NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.

B. Non-Resident (External) Rupee Account (NRE Account)

NRE account may be in the form of savings, current, recurring or fixed deposit accounts (with maturity of minimum one year). Such accounts can be opened only by the NRI (as defined under Regulation 2(vi) of Notification No. FEMA 5/2000-RB dated May 3, 2000) himself and not through the holder of the power of attorney.

NRIs may be permitted to open NRE account with their resident close relatives (relative as defined in Section 6 of the Companies Act, 1956) on 'former or survivor 'basis. The resident close relative shall be eligible to operate the account as a Power of Attorney holder in accordance with the extant instructions during the life time of the NRI/PIO account holder.

C. Foreign Currency Non Resident (Bank) Account - FCNR (B) Account

NRIs are eligible to open and maintain these accounts.

FCNR (B) accounts are only in the form of term deposits of 1 to 5 years

All debits / credits permissible in respect of NRE accounts, including credit of sale proceeds of FDI investments, are permissible in FCNR (B) accounts also.

Account can be held in any freely convertible currency.

Loans can be extended against security of funds held in FCNR (B) deposit either to the depositors or third parties without any ceiling subject to usual margin requirements.

Best Bank to Open Account for NRI

Private banks compete with public sector banks in India to offer a host of services to NRIs and people of Indian origin (PIOs).

Those like ICICI bank, HDFC bank and Kotak Mahindra vie with one another to lure NRI customers with international debit cards, online banking facility, easy fund transfer from NRE to NRO accounts and opening of FCNR deposits.

Banks also offer technical assistance for NRI customers to avail loans for purchasing properties. They give investment advice and helping in building assets and multiplying their savings account through proper trading in equities through mutual funds.

In short, both private and PSU banks offer one-stop financial solutions to NRIs keeping in view their needs and their desire to build valuable and growing asset class back home in India.

NRI Home Loans

Many banks design loan products for NRI customers with innovative features like simplified procedure, no foreclosure charges, flexible repayment schedule and transparency with no hidden cost. However, it is up to the NRI customers to do a detailed cost-benefit analysis before choosing the bank to avail loans for their asset investments like buying a house, plot of land or a commercial space.

Before entering into a negotiation with a bank, it is always better to find out through discreet enquiries with relatives in India on where and what to invest and which channel has to be taken to fund the acquisition process.

While real estate is booming across the country, one needs accurate planning to decide where to buy a property (be it house or plot). Most NRIs prefer to buy a luxury apartment in the city where they plan to return and settle down. In such a case, it is important to zero in on the reputed builder known for successful projects in the past and can facilitate the home loan process from the banks.